Trust accounts play an important role in protecting funds held by real estate businesses and ensuring they meet their regulatory obligations. But not all real estate trust accounts are subject to the same requirements.

The type of trust account a business operates determines the legislation that applies, the audit requirements it needs to meet and the way those obligations should be managed.

In this article, we look at the main types of real estate trust accounts and highlight the key audit and compliance considerations for each.

If you run a real estate agency, property management business or brokerage, knowing which category you fall into helps you plan for audit season with confidence.

Overview of real estate trust account types

Real estate agencies may operate different types of trust accounts depending on the services they provide. The regulatory and audit requirements vary depending on the nature of the funds being held and the activities undertaken by the business.

Most of these fall under the Real Estate Authority (REA), the regulator established under the Real Estate Agents Act 2008.

Key considerations for business owners

It’s a common source of confusion — many business owners don’t realise which regime applies to them until audit time rolls around.

The most significant distinction is that sales, licensed commercial property management, and business broker trust accounts are regulated under the Real Estate Agents Act 2008 and are subject to the REA’s prescribed trust account audit framework.

In contrast, residential property management businesses are generally governed by the Residential Tenancies Act 1986 and related legislation. However, there is no equivalent statutory trust account audit regime comparable to the Real Estate Agents (Audit) Regulations 2009. Audit requirements may arise through franchise arrangements, company policy, or contractual requirements.

This distinction is important when determining governance responsibilities, compliance obligations, audit planning, and risk management arrangements within a real estate business.

Understanding which requirements apply to your trust account is an important part of managing compliance and reducing risk. The requirements can differ depending on the type of service your business provides and the nature of the funds being held.

For further guidance, see the Real Estate Authority’s information on trust accounts.

Not sure which requirements apply to your business? We’re happy to talk it through — get in touch with the BVO Audit team.